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2022 (2) TMI 972 - AT - Income TaxAddition u/s 68 - Unexplained cash deposit - AO did not accept the explanation of source of cash from Shri. Narayan Iyengar HUF - HELD THAT:- AO disbelieved receipt of cash from the HUF on the ground that the income of HUF declared for Assessment Years 2016-17 and 2017-18 was not sufficient to prove the gift given by the HUF - AO also mentioned that the HUF did not respond to the notice by the AO u/s 133(6) which is not correct and a reply was filed by the HUF on 13.09.2019 reiterating the fact that the HUF has given cash as gratis. AO and CIT(A) in our opinion proceeded on the basis that the current year’s income should have been more than ₹ 3 lakhs and only then the payment of cash to the assessee can be justified. In coming to this conclusion, they have ignored the fact that the HUF had declared income in the past and did not doubt the availability of accumulated cash from past savings - Addition of ₹ 3 lakhs being cash received from HUF cannot be sustained and the same is directed to be deleted. Upendranath has acknowledged having paid a sum of ₹ 5 lakhs to the assessee on 10.11.2016 by cash. Upendranath has been filing his Return of Income and the copy of Return of Income filed by him for Assessment Years 2016-17 to 2019-20 have been filed before the lower authorities. These facts have been overlooked by the Revenue authorities. Identity of Upendranath cannot be disputed because even in the ground of appeal raised by the assessee before the CIT(A), specific assertion was made by the assessee in reply to the notice issued by the AO u/s 142(1), the assessee has given all the details of Upendranath including his address and PAN number. These facts have not been considered by the AO or the CIT(A). Assessee has sufficiently established the identity, capacity and genuineness of the transactions and in the circumstances, the addition made cannot be sustained. The same is directed to be deleted. - Decided in favour of assessee.
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